Black & Decker Inc v GMCA Pty Ltd (No 3) - [2008] FCA 932

FEDERAL COURT OF AUSTRALIA
Black & Decker Inc v GMCA Pty Ltd (No 3) [2008] FCA 932
COSTS – applicant successful overall but not on all issues – whether appropriate to apportion costs on issue by issue basis – whether indemnity costs should be awarded on basis of conduct leading to loss of trial date and failure to admit facts
Federal Court of Australia Act 1976 (Cth) s 31A
Black & Decker Inc v GMCA Pty Ltd (No 2) [2008] FCA 504 referred to
Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 cited
Cretazzo v Lombardi (1975) 13 SASR 4 cited
Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 referred to
Ragata Develpopments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court of Australia, Davies J, 5 March 1993) cited
Ungar v Sugg (1899) 9 RPC 113 cited
Welcome Real-Time SA v Catuity Inc (No 2) [2001] FCA 785 cited
BLACK & DECKER INC and BLACK & DECKER (AUSTRALIA) PTY LTD v GMCA PTY LTD
VID 1262 OF 2005
HEEREY J
19 JUNE 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 1262 OF 2005

BETWEEN:

BLACK & DECKER INC
First Applicant

BLACK & DECKER (AUSTRALIA) PTY LTD
Second Applicant

AND:

GMCA PTY LTD
Respondent

JUDGE:

HEEREY J

DATE OF ORDER:

19 JUNE 2008

WHERE MADE:

MELBOURNE

THE COURT DECLARES THAT:
1.The Respondent has infringed claims 1 and 3 to 8 (inclusive) of Australian Standard Patent No. 757412 (“the Standard Patent”) by exploiting in Australia the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM50 (“the Tyrannosaw Mark I”).
2.The Respondent has infringed claims 1 to 6 (inclusive) of the Standard Patent by exploiting in Australia the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM51 (“the Tyrannosaw Mark II”).
3.The Respondent has infringed claims 1 to 5 (inclusive) of Australian Innovation Patent No. 2002100583 (“the Innovation Patent”) by exploiting in Australia the Tyrannosaw Mark I.
4.The Respondent has infringed claims 1 to 5 (inclusive) of the Innovation Patent by exploiting in Australia the Tyrannosaw Mark II.
THE COURT CERTIFIES THAT:
5.For the purposes of s 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 8 of the Standard Patent was questioned unsuccessfully in these proceedings.
6.For the purposes of s 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 5 of the Standard Patent was questioned unsuccessfully in these proceedings.
THE COURT ORDERS THAT:
7.The Respondent whether by itself, its directors, officers, servants or agents or otherwise howsoever during the term of the Standard Patent is restrained from infringing claims 1 to 8 inclusive of the Standard Patent and in particular, from:
(a)importing, making, selling, supplying, or otherwise disposing of or offering to make, sell, supply or otherwise dispose of or using or keeping for the purpose of doing any of those things, the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM50…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FCA 932
Decision Date: 19 June 2008

CaseChat Overview and Summary

Black & Decker Inc (B & D) initiated proceedings against GMCA Pty Ltd in the Federal Court of Australia, seeking relief for alleged patent infringement by GMCA’s products. The case revolved around B & D’s claims that GMCA’s products infringed on their patents, specifically the Standard Patent and the Innovation Patent. The dispute also included requests for declarations, certifications, and injunctive relief against GMCA. Central to the litigation was GMCA's refusal to admit to key factual assertions regarding the infringement and validity of B & D’s patents, despite multiple notices to admit and subsequent correspondence from B & D.

The court was required to decide several critical issues, including whether GMCA’s products infringed on B & D’s patents, the validity of the patents in question, and the appropriate relief to be granted. The court also had to determine the costs incurred due to GMCA’s refusal to admit facts and the consequent adjournment of the trial date. The key legal issue was whether the court should grant the relief sought by B & D, including declarations of infringement and invalidity, and whether the costs incurred due to GMCA’s conduct should be awarded on an indemnity basis.

The court found that GMCA's products did indeed infringe B & D’s patents, as the facts presented by B & D were not adequately contested by GMCA. The court also found that the patents in question were valid. Consequently, the court granted the declarations and certifications sought by B & D and issued an injunction against GMCA from further infringing the patents. The court further ordered GMCA to deliver up or destroy specified products and to provide detailed information regarding sales and profits derived from the infringing products. Regarding costs, the court ruled that GMCA should pay B & D’s costs on an indemnity basis for the costs wasted or duplicated due to GMCA’s conduct in refusing to admit facts and the resulting adjournment of the trial date. The court scheduled further directions to assist in determining the appropriate quantum of damages or an account of profits.

Orders

Orders of the court

7. The Respondent whether by itself, its directors, officers, servants or agents or otherwise howsoever during the term of the Standard Patent is restrained from infringing claims 1 to 8 inclusive of the Standard Patent and in particular, from:

(a) importing, making, selling, supplying, or otherwise disposing of or offering to make, sell, supply or otherwise dispose of or using or keeping for the purpose of doing any of those things, the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM50 (“the Tyrannosaw Mark I”);

(b) importing, making, selling, supplying, or otherwise disposing of or offering to make, sell, supply or otherwise dispose of or using or keeping for the purpose of doing any of those things, the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM51 (“the Tyrannosaw Mark II”);

8. The Respondent is to deliver up on oath to the Applicants or their nominated agent or destroy under the supervision of the Applicants or their nominated agent all power tools, power saws, apparatus or other products or things in the possession, custody or control of the Respondent, the importation, sale, supply or use of which would be a breach of any of the foregoing injunctions, by 27 June 2008.

9. The Cross-Claim be dismissed.

10. The Respondent pay the Applicants’ costs of the Claim and the Cross-Claim, including reserved costs, such costs to be taxed as between party and party, save that there be taxed on an indemnity basis the costs wasted or duplicated by reason of:

(a) the Respondent’s fourth (19 December 2006) and fifth (18 April 2007) particulars of invalidity, and

(b) the adjournment of the trial date of 10 April 2007.

THE COURT DIRECTS THAT:

11. On or before 23 June 2008 the Respondent file and serve an affidavit setting out:

(a) the number of units of the Tyrannosaw Mark I sold by the Respondent, or for which purchase orders have been placed with the Respondent;

(b) the number of units of the Tyrannosaw Mark II sold by the Respondent, or for which purchase orders have been placed with the Respondent;

(c) names and addresses of the customers to whom the sales or prospective sales referred to in sub-paragraphs (a) and (b) above were made;

(d) the sums received or receivable in respect of the sales or prospective sales referred to in sub-paragraphs (a) and (b) above; and

(e) an approximate estimate of the costs and profits derived or to be derived from the sales or prospective sales referred to in sub-paragraphs (a) and (b) above, and particulars as to how that estimate was made.

12. Reserve to the Applicants liberty to apply for limited discovery to assist in the making of the Applicants’ election as to whether they wish to recover damages or an account of profits.

13. The Applicants file and serve a written notice of their election as to a claim for damages or an account of profits in respect of all infringements of the Standard Patent and the Innovation Patent by the Respondent, by 4 July 2008.

14. The matter be listed for further directions on 14 July 2008 at 9.00am.

15. Liberty to apply.

Background

Background to the litigation

B & D should receive costs on an indemnity basis for costs wasted or duplicated by reason of this adjournment of the trial date.Notice to admit facts On 12 October 2006, that is almost a year after the commencement of proceedings and about six months before the scheduled trial date, B & D’s solicitors served a notice to admit facts on GMCA. By this stage the parties had completed discovery but had not filed any evidence. The notice to admit covered issues including:·Incorporation of the B & D companies;·Sale of GMCA’s allegedly infringing products (including trap purchases);·Whether those products possessed any of the integers of the patents in suit. Most of such facts, which arise in a case concerning relatively simple mechanical products sold at retail level, should have presented little real difficulty for admissions. The only matter GMCA was prepared to admit was that the B & D companies were incorporated, and then only subject to the production of certificates of incorporation. Despite requests by B & D’s solicitors that GMCA reconsider its position, no further admissions were forthcoming. On 15 December 2006 B & D filed further affidavits dealing with various matters the subject of the notice to admit. On the same day GMCA filed an affidavit by its principal expert, Dr Stark, in which he concluded that many of the integers of the claims of the patents were present in GMCA’s products and all of the integers of claims 1 to 5 of the Innovation Patent were present in the T1 product. On 31 July 2007 B & D filed a second notice to admit repeating the facts set out in the first notice. Further correspondence ensued, but no admissions were made by GMCA. B & D’s solicitors wrote on 27 September noting that the matters not admitted included:(a) that the Tyrannosaw products are each “a power tool having a linear reciprocating output” (Facts 7(a) and 21(a));(b) that the Tyrannosaw products each have “a body housing a motor for driving the power tool, the body including a fixed handle to allow a user to manually hold and operate the power tool” (Facts 7(b) and 21(b));(c) that the Tyrannosaw products are each “a power tool wherein the tool includes a saw” (Facts 8 and 23);(d) that the Tyrannosaw products are each “a power tool wherein the reciprocating output of [the tool] includes an array of interchangeable saw blades” (Facts 9 and 24);(e) that the Tyrannosaw Mark I is “a power tool wherein the handle includes a substantially D-shaped handle formed integrally with the body” (Fact 12);(f) that the Tyrannosaw products are each “a power saw comprising a body housing a motor and a drive system linking the motor to a blade mount such that operation of the motor causes reciprocation of the blade mount” (Facts 14(a) and 27(a));(g) that the Tyrannosaw products each have “a plurality of interchangeable saw blades for releasable connection to the blade mount” (Facts 14(b) and 27(b));(h) that the Tyrannosaw products each have “a body having at a rear end thereof a handle to allow a user to hold and operate the saw, and a trigger carried by the handle for actuating the motor” (Facts 14(d) and 27(d));(i) that the Tyrannosaw products can each “be used in the manner of a handsaw by forwards and rearwards motion of body by means of the hand” (Facts 17(a) and 30(a)); and(j) that the Tyrannosaw products each have “a jigsaw blade which is of substantially uniform depth along its length” (Facts 18(a) and 31(a)).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

HEEREY J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: HEEREY J

Judgment on liability was handed down on 18 April 2008: Black & Decker Inc v GMCA Pty Ltd (No 2) [2008] FCA 504. Subsequently I heard argument as to some aspects of the relief sought. Declarations, certificates and injunctions The applicants (collectively B & D) seek, inter alia, the following orders:THE COURT DECLARES THAT:1. The Respondent has infringed claims 1 and 3 to 8 (inclusive) of Australian Standard Patent No. 757412 (“the Standard Patent”) by exploiting in Australia the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM50 (“the Tyrannosaw Mark I”).2. The Respondent has infringed claims 1 to 6 (inclusive) of the Standard Patent by exploiting in Australia the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM51 (“the Tyrannosaw Mark II”).3. The Respondent has infringed claims 1 to 5 (inclusive) of Australian Innovation Patent No. 2002100583 (“the Innovation Patent”) by exploiting in Australia the Tyrannosaw Mark I.4. The Respondent has infringed claims 1 to 5 (inclusive) of the Innovation Patent by exploiting in Australia the Tyrannosaw Mark II.THE COURT CERTIFIES THAT:5. For the purposes of s 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 8 of the Standard Patent was questioned unsuccessfully in these proceedings.6. For the purposes of s 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 5 of the Standard Patent was questioned unsuccessfully in these proceedings.THE COURT ORDERS THAT:7. The Respondent whether by itself, its directors, officers, servants or agents or otherwise howsoever during the term of the Standard Patent is restrained from infringing claims 1 to 8 inclusive of the Standard Patent and in particular, from:(a) importing, making, selling, supplying, or otherwise disposing of or offering to make, sell, supply or otherwise dispose of or using or keeping for the purpose of doing any of those things,, the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM 50 (“the Tyrannosaw Mark I”);(b) importing, making, selling, supplying, or otherwise disposing of or offering to make, sell, supply or otherwise dispose of or using or keeping for the purpose of doing any of those things, the multi-purpose power saw sold under the name “Tyrannosaw” with Model No. TRM 51 (“the Tyrannosaw Mark II”);(c) authorising any person to do any act which would be a breach of the injunction referred to 7(a) and (b) above. Senior counsel for GMCA argued that the findings of the Court in relation to the Standard Patent concerned only claim 6, which dealt specifically with a power tool used as a panel saw and a jigsaw (see the full text of the claims of the Standard Patent at [16] of the substantive judgment). The declarations and certificates sought are appropriate. B & D’s application from the outset sought declarations that GMCA’s two products, referred to in the judgment as T1 and T2, infringed, in the case of T1, claims 1 and 3 to 8 of the Standard Patent and, in the case of T2, claims 1 to 6. The cross-claim sought declarations of invalidity of those claims. Thus the validity of all claims was in issue. Likewise the respondent sought revocation on alleged grounds of invalidity, which referred to all claims. Debate particularly centred on the term “vector” which appears in claim 1 and is carried forward into all the subsequent claims. The declarations and certificates sought are appropriate.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1262 OF 2005

JUDGE:	HEEREY J
DATE OF ORDER:	19 JUNE 2008
WHERE MADE:	MELBOURNE